Spanish CEOs foresee a recession in the coming months, although it will be "smooth and short"

Oct. 16 () –

96% of the CEOs of Spanish companies expect an economic recession to occur in the next twelve months, although 64% believe it will be “mild and short-lived”, according to the KPMG CEO Outlook 2022 report.

86% of those surveyed in Spain indicate that a new recession would make recovery after the pandemic difficult and 22% estimate that their income would be reduced by at least 10% in that scenario. This situation is transferred to employment: 52% have frozen hiring, 48% have considered reducing their workforce and 38% plan to do so in the next six months.

In the medium term, managers are more optimistic: 98% trust the growth of the national economy and that of their organizations in the next three years and 72% anticipate that the number of workers in their organization will increase in that period.

“The Spanish CEOs show a cautious attitude regarding the evolution of the economy in the coming months and are swiftly adopting measures to protect their organizations in an uncertain and volatile environment such as the current one. At the same time, they trust in the good economic evolution in the medium term, which is why they guide corporate agendas to continue advancing in the transformation of their organizations in the coming years, with a special focus on digital transformation and the value proposition to the employee”, highlighted the president of KPMG Spain, Juanjo Cano.

Regarding the measures adopted to face the “immediate challenges”, 70% have redefined their pricing policy to reflect the increase in costs, while 58% have promoted solutions to increase productivity and 54% have relocated operations , reduced its profit margin or diversified its supply chain.

The current situation has also forced them to redefine digitalization strategies: 58% of Spanish CEOs have paralyzed their digital transformation strategy or will do so in the next six months compared to the average of 77%.

In fact, 24% of Spanish respondents have indicated that advancing digital transformation and connectivity between businesses is their main operational priority to achieve their growth objectives in the next three years.

Political uncertainty has increased the relevance of cybersecurity, with 68% stating that their organization is more concerned about a possible cyberattack. In addition, 30% consider that their organization is not sufficiently prepared for this type of threat, 18 percentage points more than the previous year.

Another of the priorities of the top Spanish managers is the value proposition for the employee, pointed out by 24% of those surveyed, given the influence of the challenges of the global economy on the strategies to attract and retain talent.

Thus, 76% are concerned about the impact of the inflationary environment and the increase in the cost of living on talent loyalty.

ALMOST HALF STOPPING THEIR ESG PLANS

52% of Spanish CEOs state that ESG programs contribute to improving the company’s financial results, two percentage points more than last year.

However, faced with a possible recession, 48% have decided to stop or reconsider their plans in this area and 46% plan to do so in the next six months.